Cisco expects faster growth due to digital transformation trends
More than two decades ago, Internet technology pioneer Cisco Systems Inc.’s business was booming as companies implemented its routers and other products to grow in the new, digital-focused world of commerce.
Cisco’s fiscal year 2022 ended on July 31 with a relative failure. The provider of Internet equipment, products and software for cloud technologies reported a Q4 sagging in revenue of $13.1 billion. The company also reported modest full-year revenue growth of 3% compared to the same period last year to $51.6 billion.
Cisco records the gains from a surge in orders for internet technology products fueling its customers’ digital transformation, chairman and CEO Chuck Robbins said. Product orders for the entire year and the number of outstanding orders are at an all-time high and reflect the high demand that the company continues to see for its innovations.
The increasing demand is running across several product lines that support companies’ transitions to more digitally focused operations.
There are currently more technology transitions occurring concurrently than he’s seen in 20 years,Robbins said. ‘”Long-term megatrends” like cloud technology deployments and internet-of-things sensors used in digital supply chains and automated ecommerce operations “will likely provide tailwinds to our growth.” According to the company’s CEO, they see significant opportunity ahead as their customers build out massively scalable cloud networks. Cisco’s web-scale business supports customers’ deployment of large data centers and other digital transformation projects.
Cisco did not report its e-commerce revenue for the fiscal fourth quarter or year. But the company notes on its website that most customers place orders with Cisco technology implementation partners who use the Cisco Commerce web portal to customize products, receive offers, check prices and place orders. In the past, Cisco claimed to process about 60% of orders through the Cisco Commerce web portal. This will amount to about $31 billion of e-commerce orders in fiscal year 2022.
Robbins said Cisco had “record net income” for the year ended July 30 of $11.81 billion. That’s up 11.5% from the prior fiscal year. He attributed that increase to the company’s operating discipline despite external challenges, including supply chain and inflation.
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